LIST OF CONTENTS AND TABLES

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2 LIST OF CONTENTS AND TABLES Rtd Coffee in South Korea - Category analysis... 1 Headlines... 1 Trends... 1 Competitive Landscape... 2 Prospects... 2 Category Data... 3 Table 1 Off-trade Sales of : Volume Table 2 Off-trade Sales of : Value Table 3 Off-trade Sales of : % Volume Growth Table 4 Off-trade Sales of : % Value Growth Table 5 Company Shares of by Off-trade Volume Table 6 Brand Shares of by Off-trade Volume Table 7 Company Shares of by Off-trade Value Table 8 Brand Shares of by Off-trade Value Table 9 Forecast Off-trade Sales of : Volume Table 10 Forecast Off-trade Sales of : Value Table 11 Forecast Off-trade Sales of : % Volume Growth Table 12 Forecast Off-trade Sales of : % Value Growth Rtd Coffee in South Korea - Company Profiles... 7 Haitai Beverage Co Ltd in Soft Drinks (south Korea)... 7 Strategic Direction... 7 Key Facts... 7 Summary 1 Haitai Beverage Co Ltd: Key Facts... 7 Summary 2 Haitai Beverage Co Ltd: Operational Indicators... 7 Company Background... 7 Production... 8 Summary 3 Haitai Beverage Co Ltd: Production Statistics Competitive Positioning... 8 Summary 4 Haitai Beverage Co Ltd: Competitive Position Lotte Chilsung Beverage Co Ltd in Soft Drinks (south Korea)... 9 Strategic Direction... 9 Key Facts... 9 Summary 5 Lotte Chilsung Beverage Co Ltd: Key Facts... 9 Summary 6 Lotte Chilsung Beverage Co Ltd: Operational Indicators... 9 Company Background Production Summary 7 Lotte Chilsung Beverage Co Ltd: Production Statistics Competitive Positioning Summary 8 Lotte Chilsung Beverage Co Ltd: Competitive Position Soft Drinks in South Korea - Industry Overview Executive Summary Premiumisation Leads Healthy Growth... 12

3 Health and Wellness Continues To Attract Consumers Two Leading Companies Maintain Positions sparkling Becomes Popular Soft Drinks Will See Rapid Growth But Rapid Change Key Trends and Developments Premiumisation Continues To Drive Growth sparkling Well Received by South Korean Consumers Leading Players Remain in Strong Positions Specialist Coffee Shops the Entry Channel for Premium Soft Drinks Marketing Strategies Through Smartphones Become Active Market Data Table 13 Off-trade vs On-trade Sales of Soft Drinks (as sold) by Channel: Volume Table 14 Off-trade vs On-trade Sales of Soft Drinks (as sold) by Channel: % Volume Growth Table 15 Off-trade vs On-trade Sales of Soft Drinks by Channel: Value Table 16 Off-trade vs On-trade Sales of Soft Drinks by Channel: % Value Growth Table 17 Off-trade vs On-trade Sales of Soft Drinks (as sold) by Category: Volume Table 18 Off-trade vs On-trade Sales of Soft Drinks (as sold) by Category: % Volume Table 19 Off-trade vs On-trade Sales of Soft Drinks by Category: Value Table 20 Off-trade vs On-trade Sales of Soft Drinks by Category: % Value Table 21 Off-trade Sales of Soft Drinks (as sold) by Category: Volume Table 22 Off-trade Sales of Soft Drinks (as sold) by Category: % Volume Growth Table 23 Off-trade Sales of Soft Drinks by Category: Value Table 24 Off-trade Sales of Soft Drinks by Category: % Value Growth Table 25 Company Shares of Off-trade Soft Drinks (as sold) by Volume Table 26 Brand Shares of Off-trade Soft Drinks (as sold) by Volume Table 27 Company Shares of Off-trade Soft Drinks (RTD) by Volume Table 28 Brand Shares of Off-trade Soft Drinks (RTD) by Volume Table 29 Company Shares of Off-trade Soft Drinks by Value Table 30 Brand Shares of Off-trade Soft Drinks by Value Table 31 Off-trade Sales of Soft Drinks by Category and Distribution Format: % Analysis Table 32 Forecast Off-trade vs On-trade Sales of Soft Drinks (as sold) by Channel: Volume Table 33 Forecast Off-trade vs On-trade Sales of Soft Drinks (as sold) by Channel: % Volume Growth Table 34 Forecast Off-trade vs On-trade Sales of Soft Drinks by Channel: Value Table 35 Forecast Off-trade vs On-trade Sales of Soft Drinks by Channel: % Value Growth

4 Table 36 Forecast Off-trade Sales of Soft Drinks (as sold) by Category: Volume Table 37 Forecast Off-trade Sales of Soft Drinks (as sold) by Category: % Volume Growth Table 38 Forecast Off-trade Sales of Soft Drinks by Category: Value Table 39 Forecast Off-trade Sales of Soft Drinks by Category: % Value Growth Appendix Fountain Sales in South Korea Data Table 40 Off-trade vs On-trade Fountain Sales of Soft Drinks: Volume Table 41 Off-trade vs On-trade Fountain Sales of Soft Drinks: % Volume Growth Table 42 Off-trade vs On-trade Fountain Sales of Carbonates: Volume Table 43 Off-trade vs On-trade Fountain Sales of Carbonates: % Volume Growth Table 44 Forecast Off-trade vs On-trade Fountain Sales of Soft Drinks: Volume Table 45 Forecast Off-trade vs On-trade Fountain Sales of Soft Drinks: % Volume Growth Table 46 Forecast Off-trade vs On-trade Fountain Sales of Carbonates: Volume Table 47 Forecast Off-trade vs On-trade Fountain Sales of Carbonates: % Volume Growth Definitions Summary 9 Research Sources... 33

5 RTD COFFEE IN SOUTH KOREA - CATEGORY ANALYSIS HEADLINES Sales of RTD coffee increase by 7% in total volume terms in 2010 Based on the popularity of specialist coffee shops brands in the retail channel, RTD coffee shows a strong performance Sales increase by 11% in off-trade value terms in 2010 Average unit prices increase by 4% in 2010, mainly as a result of the premiumisation trend within the category Lotte Chilsung Beverage Co Ltd continues to lead the category with a 40% value share in 2010 RTD coffee is expected to see both total volume and constant value sales grow at a CAGR of 6% over the forecast period TRENDS RTD coffee continued to register healthy growth, with total volume sales rising by 7% in While specialist coffee shops grew in popularity during 2010, RTD coffee has been premiumised and performed very well. As RTD coffee manufacturers actively introduced premium RTD coffee products, specialist coffee shop operators also expanded their presence in RTD coffee; this trend started with Starbucks in 2007 which expanded into local specialist coffee brands, while Angel-in-us Coffee by Lotteria Co Ltd and Café Bene by Café Bene Co Ltd also introduced their branded RTD coffees in 2010 and earned popularity among South Korean consumers. The unit price of RTD coffee increased by 4% in 2010, being impacted by the premiumisation through specialist coffee shop brands. Previously, the unit price of canned RTD coffee, such as Let s Be (Lotte Chilsung Beverage Co Ltd), was around Won650 per 175ml pack, while mid-premium RTD coffee was priced at around Won1,200 per 200ml pack, including French Café Cappuccino (offered in cup format) by Namyang Dairy Products Co Ltd and Caffé Latte Barista Smokey by Maeil Dairy Industry Co Ltd, which entered the category in the early 2000s in South Korea. In 2010, however, the unit price of some RTD coffee increased to more than Won1,500 for a 200ml pack, as was the case with Cantata Original Sweet Black by Lotte Chilsung and Starbucks Discoveries Espresso - Milano by Seoul Dairy Cooperative Co Ltd. These high prices are the result of the use of high quality coffee beans, which come with a premium price tag. Chained specialist coffee shop-branded RTD coffee, including Starbucks, Café Bene and Angel-in-us Coffee showed strong performance in Most of these specialist coffee shops are working with packaged food manufacturers, which produce the RTD coffee, having distribution agreements that place the brands in the retail environment. Starbucks has an agreement with Dongsuh Foods Co Ltd, Café Bene is working with Daesang Corp and Angelin-us Coffee with Lotte Chilsung. These specialist coffee shop RTD coffee brands have been well accepted by young female consumers in their 20s and 30s, as they appreciate being able

6 to enjoy the same coffee flavours at a lower price at home, with most of those RTD coffee brands available through convenience stores. COMPETITIVE LANDSCAPE Lotte Chilsung Beverage Co Ltd maintained its leadership of the RTD coffee category with a 44% share in off-trade volume terms. Its Let s Be brand leads the category with a high level of penetration and wide distribution across a range of grocery retailers. However, its value sales decreased by 1% in 2010 as a result of the introduction of other premium brands. Cantata, the company s other brand introduced in 2007, for example, showed a positive performance in value terms in 2010 as its value sales rose by 20%. This however was not sufficient to stop the company s share declining overall. PROSPECTS RTD coffee will continue to show healthy growth over the forecast period, with a CAGR of 6% in both off-trade constant value and volume terms. Within the foodservice industry, it is anticipated that specialist coffee shops will grow over the forecast period, meaning that

7 consumers preference for premium coffee will also develop. This trend will affect the RTD coffee category, as manufacturers will try to launch new premium variants to appeal to South Korean consumers who are already familiar with better quality coffee. At the same time, operators of chained specialist coffee shop brands will try to introduce RTD coffee to expand their brands presence through retail channels. CATEGORY DATA Table 1 Off-trade Sales of : Volume million litres Table 2 Off-trade Sales of : Value Won billion Table 3 Off-trade Sales of : % Volume Growth % volume growth 2009/ CAGR 2005/10 TOTAL Table 4 Off-trade Sales of : % Value Growth % current value growth 2009/ CAGR 2005/10 TOTAL

8 Table 5 Company Shares of by Off-trade Volume % off-trade volume Company Total Table 6 Brand Shares of by Off-trade Volume % off-trade volume Brand Company Total Table 7 Company Shares of by Off-trade Value % off-trade value rsp Company

9 Total Table 8 Brand Shares of by Off-trade Value % off-trade value rsp Brand Company Total Table 9 Forecast Off-trade Sales of : Volume '000 litres Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

10 Table 10 Forecast Off-trade Sales of : Value Won mn Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Table 11 Forecast Off-trade Sales of : % Volume Growth % volume growth 2014/ CAGR 2010/15 TOTAL Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Table 12 Forecast Off-trade Sales of : % Value Growth % constant value growth CAGR 2010/15 TOTAL Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

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16 SOFT DRINKS IN SOUTH KOREA - INDUSTRY OVERVIEW EXECUTIVE SUMMARY Premiumisation Leads Healthy Growth In 2010, soft drinks experienced healthy growth, registering a 6% increase in off-trade value sales and a 5% increase in off-trade volume sales, thanks to a premiumisation trend, especially within bottled water, fruit/vegetable juice, carbonates and RTD coffee. Imported and premium brands of bottled water, carbonated bottled water and fruit/vegetable juice recorded healthy growth rates. In the case of fruit/vegetable juice, the category continued to see declining volume sales but imported premium juice expanded its presence in South Korea. New flavours of carbonates and renewed brands without sugar and preservatives were also popular launches. However, RTD tea and Asian speciality drinks showed volume declines as they fell out of fashion. Health and Wellness Continues To Attract Consumers With the growing health and wellness trend, healthy concepts remained popular among South Korean consumers. In particular, various vitamins have been used to target different consumer groups and manufacturers have highlighted the varied functions of different vitamins in their products, targeting sophisticated South Korean consumers. Vitamin B has been marketed for its anti-ageing properties. Vitamin C and collagen remained among the favourite ingredients for skin health. At the same time, manufacturers tried to strengthen healthy brands through advertising, the shape of packaging and using brand names to appeal to a sophisticated South Korean consumer base. Two Leading Companies Maintain Positions Lotte Chilsung Beverage Co Ltd and Coca-Cola Korea Co maintained the two leading positions in 2010, accounting for a 48% combined share in off-trade value terms. Lotte Chilsung remained in the leading position with 33% of off-trade value sales in The company strengthened its product portfolio, launching premium fruit/vegetable juice and sports drinks and renewing its well-known carbonates and flavoured bottled water lines, recording a positive growth rate although a decline in share. Coca-Cola Korea also introduced a smaller version of its Coca-Cola brand, Mini Coke, which proved popular among younger consumers. sparkling Becomes Popular In 2010, sparkling was a popular concept within soft drinks. South Koreans generally perceive sparkling drinks to be less healthy, a traditional perception associated with carbonates. However, carbonates have seen continued positive growth since 2008, despite the health and wellness trend. Growing numbers of South Korean consumers looking for refreshing carbonated options in soft drinks have become apparent. New product developments, presented as sparkling versions of fruit/vegetable juice and RTD tea, were introduced during Carbonated bottled water experienced strong growth in Furthermore, manufacturers offered health-positioned drinks in a carbonated format to attract consumers who are sensitive to their health needs.

17 Soft Drinks Will See Rapid Growth But Rapid Change KEY TRENDS AND DEVELOPMENTS Premiumisation Continues To Drive Growth Current Impact Outlook

18 Future Impact sparkling Well Received by South Korean Consumers Current Impact Outlook

19 Future Impact Leading Players Remain in Strong Positions Current Impact Outlook

20 Future Impact Specialist Coffee Shops the Entry Channel for Premium Soft Drinks Current Impact Outlook

21 Future Impact Marketing Strategies Through Smartphones Become Active Current Impact Outlook Future Impact

22 MARKET DATA Table 1 million litres OFF-trade ON-trade Total Off-trade vs On-trade Sales of Soft Drinks (as sold) by Channel: Volume Excludes powder concentrates Table 2 Off-trade vs On-trade Sales of Soft Drinks (as sold) by Channel: % Volume Growth % volume growth OFF-trade ON-trade Total 2009/ CAGR 2005/10 TOTAL Excludes powder concentrates Table 3 Off-trade vs On-trade Sales of Soft Drinks by Channel: Value Won billion OFF-trade ON-trade Total Table 4 Off-trade vs On-trade Sales of Soft Drinks by Channel: % Value Growth % current value growth OFF-trade ON-trade Total 2009/ CAGR 2005/10 TOTAL

23 Table 5 million litres Off-trade vs On-trade Sales of Soft Drinks (as sold) by Category: Volume 2010 Off-trade On-trade TOTAL Bottled Water Carbonates Concentrates Fruit/Vegetable Juice RTD Tea Sports and Energy Drinks Asian Speciality Drinks Soft Drinks Excludes powder concentrates Table 6 Off-trade vs On-trade Sales of Soft Drinks (as sold) by Category: % Volume 2010 % volume analysis Bottled Water Carbonates Concentrates Fruit/Vegetable Juice RTD Tea Sports and Energy Drinks Asian Speciality Drinks Soft Drinks Off-trade On-trade Total Excludes powder concentrates Table 7 Off-trade vs On-trade Sales of Soft Drinks by Category: Value 2010 Won billion Bottled Water Carbonates Concentrates Fruit/Vegetable Juice RTD Tea Sports and Energy Drinks Asian Speciality Drinks Soft Drinks Off-trade On-trade TOTAL

24 Table 8 Off-trade vs On-trade Sales of Soft Drinks by Category: % Value 2010 % value analysis Bottled Water Carbonates Concentrates Fruit/Vegetable Juice RTD Tea Sports and Energy Drinks Asian Speciality Drinks Soft Drinks Off-trade On-trade Total Table 9 Off-trade Sales of Soft Drinks (as sold) by Category: Volume million litres Bottled Water Carbonates Concentrates Fruit/Vegetable Juice RTD Tea Sports and Energy Drinks Asian Speciality Drinks Soft Drinks Excludes powder concentrates Table 10 Off-trade Sales of Soft Drinks (as sold) by Category: % Volume Growth % volume growth Bottled Water Carbonates Concentrates Fruit/Vegetable Juice RTD Tea Sports and Energy Drinks Asian Speciality Drinks Soft Drinks 2009/ CAGR 2005/10 TOTAL Excludes powder concentrates Table 11 Off-trade Sales of Soft Drinks by Category: Value

25 Won billion Bottled Water Carbonates Concentrates Fruit/Vegetable Juice RTD Tea Sports and Energy Drinks Asian Speciality Drinks Soft Drinks Table 12 Off-trade Sales of Soft Drinks by Category: % Value Growth % current value growth Bottled Water Carbonates Concentrates Fruit/Vegetable Juice RTD Tea Sports and Energy Drinks Asian Speciality Drinks Soft Drinks 2009/ CAGR 2005/10 TOTAL Table 13 Company Shares of Off-trade Soft Drinks (as sold) by Volume % off-trade volume Company

26 Total Excludes powder concentrates Table 14 Brand Shares of Off-trade Soft Drinks (as sold) by Volume % off-trade volume Brand Company

27 Total Excludes powder concentrates Table 15 Company Shares of Off-trade Soft Drinks (RTD) by Volume % off-trade volume Company Others Total

28 Table 16 Brand Shares of Off-trade Soft Drinks (RTD) by Volume % off-trade volume Brand Company

29 Total Table 17 Company Shares of Off-trade Soft Drinks by Value % off-trade value rsp Company Total Table 18 Brand Shares of Off-trade Soft Drinks by Value % off-trade value rsp Brand Company

30 Others Total Table 19 Off-trade Sales of Soft Drinks by Category and Distribution Format: % Analysis 2010

31 % off-trade BW C Con F/VJ RTD C RTD T Store-Based Retailing Grocery Retailers Supermarkets/Hypermarkets Discounters Small Grocery Retailers Convenience Stores Independent Small Grocers Forecourt Retailers Other Grocery Retailers Non-Grocery Retailers Non-Store Retailing Vending Homeshopping Internet Retailing Direct Selling Total SED ASD Store-Based Retailing Grocery Retailers Supermarkets/Hypermarkets Discounters Small Grocery Retailers Convenience Stores Independent Small Grocers Forecourt Retailers Other Grocery Retailers Non-Grocery Retailers Non-Store Retailing Vending Homeshopping Internet Retailing Direct Selling Total Key: BW = bottled water; C = carbonates; Con = concentrates; F/VJ = fruit/vegetable juice; RTD C = RTD coffee; RTD T = RTD tea; SED = sports and energy drinks; ASD = Asian speciality drinks Excludes powder concentrates Table 20 Forecast Off-trade vs On-trade Sales of Soft Drinks (as sold) by Channel: Volume million litres OFF-trade ON-trade Total Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Excludes powder concentrates

32 Table 21 Forecast Off-trade vs On-trade Sales of Soft Drinks (as sold) by Channel: % Volume Growth % volume growth OFF-trade ON-trade Total 2014/ CAGR 2010/15 TOTAL Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Excludes powder concentrates Table 22 Forecast Off-trade vs On-trade Sales of Soft Drinks by Channel: Value Won billion OFF-trade ON-trade Total Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Table 23 Forecast Off-trade vs On-trade Sales of Soft Drinks by Channel: % Value Growth % current value growth OFF-trade ON-trade Total 2014/ CAGR 2010/15 TOTAL Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Table 24 Forecast Off-trade Sales of Soft Drinks (as sold) by Category: Volume million litres Bottled Water Carbonates Concentrates Fruit/Vegetable Juice RTD Tea Sports and Energy Drinks Asian Speciality Drinks Soft Drinks Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Excludes powder concentrates

33 Table 25 % volume growth Forecast Off-trade Sales of Soft Drinks (as sold) by Category: % Volume Growth / CAGR 2010/15 TOTAL Bottled Water Carbonates Concentrates Fruit/Vegetable Juice RTD Tea Sports and Energy Drinks Asian Speciality Drinks Soft Drinks Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Excludes powder concentrates Table 26 Forecast Off-trade Sales of Soft Drinks by Category: Value Won billion Bottled Water Carbonates Concentrates Fruit/Vegetable Juice RTD Tea Sports and Energy Drinks Asian Speciality Drinks Soft Drinks Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Table 27 Forecast Off-trade Sales of Soft Drinks by Category: % Value Growth % constant value growth Bottled Water Carbonates Concentrates Fruit/Vegetable Juice RTD Tea Sports and Energy Drinks Asian Speciality Drinks Soft Drinks CAGR 2010/15 TOTAL Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

34 APPENDIX Fountain Sales in South Korea Trends Fountain sales continued positive growth in on-trade volume terms while fountain on-trade volume sales through convenience stores declined during In South Korea, most fountain sales occurred in the foodservice channel, which accounted for a 97% share of total fountain volume sales in Fountain sales through convenience stores tend to be subject to seasonality, with demand being higher in summer. As such, few convenience stores offer fountain sales for soft drinks in South Korea. In addition, most convenience stores are limited in their selling space, making it increasingly difficult to site the fountains on the premises. Only a small number around school zones tend to offer fountain sales. DATA Table 28 Off-trade vs On-trade Fountain Sales of Soft Drinks: Volume million litres OFF-trade ON-trade Fountain ON-trade volume through c-store Fountain ON-trade volume through food store Total fountain ON-trade volume Total

35 Total fountain on-trade volume data included in on-trade Table 29 Off-trade vs On-trade Fountain Sales of Soft Drinks: % Volume Growth % fountain volume growth OFF-trade ON-trade Fountain ON-trade volume through c-store Fountain ON-trade volume through food store Total fountain ON-trade volume Total 2009/ CAGR 2005/10 TOTAL Total fountain on-trade volume data included in on-trade Table 30 Off-trade vs On-trade Fountain Sales of Carbonates: Volume million litres OFF-trade ON-trade Fountain ON-trade volume through c-store Fountain ON-trade volume through food store Total fountain ON-trade volume Total Total fountain on-trade volume data included in on-trade Table 31 Off-trade vs On-trade Fountain Sales of Carbonates: % Volume Growth % fountain volume growth OFF-trade ON-trade Fountain ON-trade volume through c-store Fountain ON-trade volume through food store Total fountain ON-trade volume Total 2009/ CAGR 2005/10 TOTAL Total fountain on-trade volume data included in on-trade

36 Table 32 Forecast Off-trade vs On-trade Fountain Sales of Soft Drinks: Volume million litres OFF-trade ON-trade Fountain ON-trade volume through c-store Fountain ON-trade volume through food store Total fountain ON-trade volume Total,,,,,, Total fountain on-trade volume data included in on-trade Table 33 Forecast Off-trade vs On-trade Fountain Sales of Soft Drinks: % Volume Growth % fountain volume growth OFF-trade ON-trade Fountain ON-trade volume through c-store Fountain ON-trade volume through food store Total fountain ON-trade volume Total 2014/ CAGR 2010/15 TOTAL Total fountain on-trade volume data included in on-trade Table 34 Forecast Off-trade vs On-trade Fountain Sales of Carbonates: Volume million litres OFF-trade ON-trade Fountain ON-trade volume through c-store Fountain ON-trade volume through food store Total fountain ON-trade volume Total 2, , , , , ,612.6 Total fountain on-trade volume data included in on-trade

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